When considering obtaining lawyers liability insurance, attorneys should ask several questions particular to common elements in malpractice insurance coverage. A typical professional liability insurance policy is comprised of six different elements: definitions, exclusions, limits of liability, coverage agreements, defense and settlement provisions, and conditions.
The definitions section of an insurance policy defines the terms used throughout the policy. These definitions may be critical later. Terms such as “Named Insured” will establish exactly who is covered by the policy, and may have repercussions later, for example, for future lawyers or non-attorney employees, independent contractors, or assigns of the insured. An attorney will want to carefully consider who is covered including all former, current, and future lawyers, officers, partners, shareholders, and directors.
Under the exclusions section, which outlines specific activities that are not covered by the policy, an attorney will want to ensure that all major practice areas are covered. Is coverage excluded for intentional, fraudulent, or dishonest acts? Are there exclusions for certain practice areas like real estate, or certain types of claims like sexual harassment?
The coverage agreements section will identify which services and activities are covered under the policy, and an attorney will want to ensure that these are in alignment with his or her practice. Such an agreement, for example, might provide coverage services as a lawyer, title agent, and for non-attorney employees who cause personal injury. Meanwhile, the limit of liability section establishes what the policy will pay for and provides coverage limits per claim and by aggregate. The defense and settlement provisions establish who has rights regarding settlement. Finally, the conditions section outlines any conditions to the policy’s coverage.
Examining these six elements common to lawyers liability insurance will establish the terms of a policy’s coverage.